WATERVLIET — The city suspended its deputy general manager Tuesday while it investigates her handling of state and federal grants.

Rosemary Nichols, an outspoken critic of the proposed razing of St. Patrick's Church, said she received a one-sentence letter from General Manager Mark Gleason announcing her suspension for two months without pay from her $62,639 post.

The city issued a brief statement regarding the suspension.

"Rosemary Nichols has been placed on 60-day administrative leave pending the outcome of an investigation related to performance of her official duties as deputy general manager for Planning & Community Revitalization, including the management of various federal and state grants," Gleason said in the statement. "Because this is a personnel matter and an active investigation, we cannot go into further detail at this time."

Nichols said she was told there are "certain improprieties in my CDBG accounts. They're alleging I have mishandled the grant programs."

Nichols said the allegations refer to the incorporation of Hudson River Energy Savers that she did for two contractors to enable them to perform energy audits for senior citizens using CDBG and state grants and also to keep the city in good standing to receive state energy grants.

"My interest was to save the program," Nichols said. "My interest was for the city not to be put on the blacklist."

"They should have done their due diligence," she said, referring to city officials.

Nichols said the funds in question were paid directly to the contractors.

She said she handled only the legal paperwork and did not benefit financially.

Nichols said the suspension was in retaliation for her filing a complaint of a hostile work environment and her opposition to knocking down the historic St. Patrick's Church.

The city earlier stripped Nichols of her planning and zoning responsibilities.

That move occurred after Nigro Cos. filed a rezoning request, which includes demolishing St. Patrick's and other buildings on a 3.5-acre site on 19th Street.

Nigro wants the parcel rezoned to business from residential. That would permit the construction of a 40,300-square-foot Price Chopper supermarket.